Look at it this way, yes, housing prices are down by record amounts… but maybe you can get yourself a Black Friday deal on a house?

The Case-Shiller indexes showed prices in 10 major metropolitan areas fell 18.6% in September from a year earlier and 1.9% from August. The drop marks the 10-city index’s 12th-straight monthly report of a record decline.

In 20 major metropolitan areas, home prices dropped 17.4% from the prior year, also a record, and 1.8% from August.

[WSJ]

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  1. concordia says:

    The joke’s on all of us. The people that got the ‘too good to be true’ loans don’t have a house whereas people like myself that saw through the hype can’t buy a more affordable pad because the mortgage/credit industry’s pulling back farther than the skin on a decaying corpse.

    • zigziggityzoo says:

      @concordia: Here and I just heard interest rates dropped again today…

      One can get a loan as low as 5.5% with no points bought down if your credit is good…

  2. Snarkysnake says:

    You may want to print that statement highlighted above and whip it out the next time some ignoramus Real Estate agent tries to talk you into buying a wildly overpriced house in an overheated market with an exotic loan.Houses are not bought as investments. They may BECOME a good investment if you pay the right amount in the right area at the right time,but they are at best a break even propsition and at worst a money pit.
    Living in the south , (which has had it share of overpriced developments ,like everywhere else) we always were increduloous at what California real estate was going for in its salad days. Now we know: it was all an illusion. Houses were never worth what they were going for. The value is still tied to the owners ability to afford them…

    • KyleOrton says:

      @Snarkysnake: Here, here. Hear here? Something like that.

      Only one disagreement. I don’t think things can become a good investment. Houses are more speculative. Ending up with a house that appreciates at more than the typical rate because Britney Spears’ sister moves in next door and the paparazzi will spend anything to get close is just like finding out your grandma’s ugly trash is worth a few k.

  3. Orv says:

    In a lot of the most bubble-affected markets, like California, they still have a long way to go before prices hit realistic levels. Most people shouldn’t be buying a house worth more than 3-4 times their income. If you look at what the median income is in a lot of California cities compared to the median house price, you’ll see the fantasy land that some sellers continue to live in.

    • Oranges w/ Cheese says:

      @Orv: Ugh.. then I need a raise. I was realistically looking at being able to afford an $80k to $90k house which unfortunately for me gets you townhomes and trailers here. It sucks. All I want is a house :(
      I have come to the conclusion I’m never going to be able to have a house, even though renting is so much more expensive, I can’t afford the down payment.

  4. Sucko-T says:

    But the Case-Shiller Index is flawed don’tcha know,

    “The Case-Shiller Index, which indicates that home prices are down 20%, is heavily skewed towards homes with subprime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general, says Yun, adding that both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines.”

    [rismedia.com]

    Funny how no one said “hey those subprime loans don’t count” when the market was boooming. I hate Realtors.

  5. Corporate-Shill says:

    I did some comparisons a while back

    Identical houses (virutally the same darn blue prints);

    Getto-it-was in Southern Californutza was 7 times the cost of the same house in Metro Memphis which was 2x the cost of building the house on your own land.

    Yo, stupid, that is a factor of 14x the cost of the building materials and labor to build the house. Land ain’t worth that much.

  6. stinerman says:

    Let ‘em fall.

    Some of us need them to fall so we can afford a place to live.

  7. csdiego says:

    No, I’ve checked. Any place I’d want to live in the Washington area is still out of reach for all but two-attorney couples. We have a lot of attorneys here, but not enough to soak up all the extra housing.

  8. noscamsplease says:

    I’m in the market for a house in a suburb of NYC, and I cannot tell you how many sleazy realtors have tried to convince me that there has been no depreciation in prices in “that specific neighborhood.” It’s so ridiculous.

  9. Oranges w/ Cheese says:

    I can more than afford the payments on a well priced house (nothing more than $95-100k, though) but I couldn’t get the damn loan. I have good credit, but I don’t have $25,000 to put down, and I doubt I ever will. If I do, I’d have to broke myself to do it.

  10. lotussix says:

    I just got a house (Assessed @ 103K, Appraised at 98K) for 88K and I had him pay 6% in closing (3% to buy down points and 3% for closing fees). He walked away with 82.5K approximately. I walk in with about 10K in equity. I closed with a 5 3/8% Interest Rate.

    1350 Sq Ft. 3 BR, 1 Bath. Carport. I can also finish another 200 sq feet in the basement.

    Home Inspection: No Major Defects. There are a couple if minor problems that $200 and a weekend can fix, such as paint, one new screen, a window lock, a couple conduits.

    Is it the right time to buy? It was for me. With a total PITI payment of $750, it’s a no brainer because I’ve paid more for apartments.

  11. Anonymous says:

    @Sucko-T,

    If I understand the Case-Schiller Index correctly, then it would look skewed. It was created because comparison of median home prices can be misleading. Instead, it is calculated by comparing the sale price of the same house at different points in time. To do that, it has to compare houses that have sold recently to their sale prices in the past. I suspect that a lot of recent home sales have been distress sales of houses that were previously bought at inflated prices with dubious mortgages. Even if they aren’t, they have to be compared to an index that did include a lot of those a couple of years ago simply because they were a high percentage of the mortgages written at that time.

    The good news for those of us living in the real world is that the decline is relative to the artificially high prices of a couple of years ago. In most areas, the decline has not dropped below the long term trend line. There are a couple of cities in which that isn’t true.

  12. HeyApples says:

    I propose that the next stupidly non-speculative market that should become speculative is automobiles.

    My ’87 Chevy isn’t a depreciated worthless clunker, its an underpriced fixer-up that is massively undervalued! Attractive financing available.

  13. lpranal says:

    Heh, so that’s why I have to work on friday (I work at a real estate office). Maybe I should start selling tickets in line?

    Prepare for a cacophony of “BUT! THERE’S NO SUCH THING AS A NATIONAL MARKET!” from the Realtor’s association. Which may be true, except when all the regional markets are down.

    It’s certainly interesting watch this shit storm from the front row. It certainly takes a wee bit of the edge off the irony of working here and not being able to afford a house